Common Law Ethics and Professional Practice¶

- only issue when
    - client answers no to all health questions
    - have no reason to disbelieve the client's answer
    - the first premium has be paid (by cheque or pre-authorized debit)

- the first payment has to be honoured for a TIA to be in force
    - the statement is included in the terms and conditions of a TIA

- the employer (the group itself) = plan sponsor, policyholder

- not very flexible, only allow to decide beneficary

- accelerated death benefits

- divorce = deemed the former spouse as pre-deceased
    - can claim for spousal support = "dependents relief legislation"
- would not entitle to any assets

- policyholder = policy owner = the insured
- life insured
- beneficiary
    - the designation can be with the insurer or through last will and testament

- for group policy
    - the company: plan sponsor, group insured, policyholder
    - the insurer
    - the employee: plan member, group life-insured
    - beneficiary

- declared dead
    - missing for more than 7 years
    - when some level of proof, can apply to courts sooner
    - establishing the timing of death is important
        - in order to substantiate that the policy was inforce
    - not perform an illegal act; otherwise -> "criminal act" exclusion

- has valid claim on the insurance benefit
    - collateral assignment
        - group policy can't used as collateral for a loan
        - not a change in ownership, not taxable event
        - bank can't force the client to buy from its own creditor insurance
            - which is consider tied selling
    - under a court order; eg. overdue child or spousal support payments

- deny of benefit
    - if payment would violate public policy
        - eg. paying a death benefit to a murderer
    - the insured caused the risk insured against 
        - eg. causing own death as a result of participate in an illegal act

- renewable convertible (RC)

- term rider
    - allow additional insurance amount without purchase another policy

- below are excluded
    - vehicle racing
    - illegal act
    - intentinal action cause death

- apply to
    - life insurance
    - accident and sickness contracts

- not apply to 
    - individual life insurance contract; 
        - eg. segregated funds (2 days from issue)
            - contract rescission, commissions and fees are reversed
            - no redemption charge
            - but if market value drop, the investor bear the loss
    - individual variable insurance contracts

- some jurisdictions prohibit outright
- even if not specifically prohibited in the jurisdiction, it is discouraged
- some insurer will even terminate the relationship with an agent participating in such transactions

- should act in the clients' best interest

- mis-action
    - advise on specific stock needs securities license

- agent should take notes if the answers of client not seemed to match the observation

- for doubt on non-smoke, the insurer can request a saliva test

- a reliable base of income which additional retirement income should be built
- the amount not sufficient for retirement
- only a base, other income coming from RRSPs, pensions, or other savings

- independent agents place business with two or more insurers
- the application submit through a MGA to insurance company
- MGA already has arrangement with one or more insurers

- captive agents
    - place business with only one insurer
    - consider an employee of the insurer

- coverage of the cash value
    - 100% and upto $60,000
    - 85% of the cash value

- the death benefit

- disability policy
    - for monthly income, greater of $2,000 or 85% of promised benefit

- the Canadian Constitution
    - give both provincial and federal government the right to pass laws

    - precedence below
        - common law
        - the life insurance act
        - the uniform law conference

- referral existing clients to other companies, voilate
    - PIPEDA (the personal information protection and electronic documents act)
        - establish rules on how businesss can collect and use personal info
        - only needed info is collected and disposed when no longer needed  

- FINTRAC (financial transations and reports analysis centre of Canada)
    - suspicious transactions should be reported to within 30 days

- PCMLTFA (proceeds of crime, money laundering and terrorist financing act (Canada)

- The Privacy Act
    - legislates how the federa/government handle personal info

- send emails to past and current client about new business
    - CASL (canadian anti-spam legislation)
    - prohibits CEMs (commercial electronic msg)

    - CRTC (Canadian radio-television and telecommunications commission)

- revoke a insurance license
    - the provincial regulator
    - FSCO (financial services commission of Ontario), if in Ontaria

- CISRO (the Canadian insurance service regulatory organization)

- commom law, no presumed division of assets
    - has the right to seek spousal support

- the insurance proceeeds do not form part of the deceased's estate

- POA (power of attorney) effect before become incapacitated
- enduring power of attorney, has all right
- PoAPC (power of attorney for personal case)

- beneficiary as a person other than the insured or his representative
    - for determining whether creditor protection exists

- both insured file claims with own insurers

- damage for personal injury caused by a negligent 3rd party
    - considered as compenstion for the loss of ability to earn income
    - receive tax free

- delivery of the actual policy is the "offer"
    - not the application itself
- the client's decision to take the policy is the "acceptance"